Prada performs well, Kering underperforms, but strikes back by buying 30% of Valentino

On Wednesday 27 July, the French luxury group announced the acquisition of 30% of the iconic haute couture brand Valentino, which had sales of €1.7 billion in 2022, on the occasion of the publication of Kering's fairly mixed results for the first half of 2023. The Pinault family group is hoping to revitalise the company, following mixed results for the first six months of the 2023 financial year: net profit of €1.785 billion, down 3% on the €1.988 billion achieved in the first half of the previous year.

Group sales amount to 10.1 billion euros, a slight increase of +2% compared to the same period in 2022. However, the operating results of the Houses were disappointing: the leading brand Gucci fell by a further -4% to €1.81 billion, Bottega Veneta was more or less stable at +1%, and all the "Other Houses" suffered a sharp decline in operating profit, down 34% to €224 million. The only exception was Yves Saint Laurent, which increased its ROE by +10% to €481 million.

These good results confirm the undeniable expertise of CEO Francesca Bellettini (now the Group's deputy CEO) in leading the brand and now all the Group's houses to better performances.

Kering is thus set to add Valentino to its galaxy of prestigious brands. For several years now, François-Henri Pinault has been keeping a close eye on Mayhoola, the Qatari fund which manages the Italian designer's house, owned by the Al Thani family.

Agreements between the two entities began in early July, and sources close to the matter claim that Pinault intends to acquire 100% of Valentino by 2028.

The Al Thani family was assisted in signing the purchase agreements by the Rothschild financial group.

Despite "mixed" figures for the first half of the year, Kering is continuing its expansion strategy. In a press release, the group announced that "despite persistent economic and geopolitical uncertainties in the short term, Kering will continue to deploy its strategy and vision".

While Kering is betting everything on the future, Prada is already enjoying a radiant present. In the first half of the year, the company reported very good results: sales rose by 20% to €2.232 billion. Group net profit came to 305 million euros, up 62% on the same period last year. The recovery of the Chinese market after the difficulties associated with the pandemic period and the dynamism of the European market contributed significantly to these results.

Patrizio Bertelli, Chairman of the Group and regarded as an inspiring employer (in Italy these days, he has spoken out in favour of the minimum wage law), hailed these performances, paying tribute to his teams, who are close-knit and faithful to the development strategies adopted by the company.